How a barrister sees it

These cases highlight an area of considerable legal uncertainty. While mobile phone companies boldly proclaim their terms entitle them to the full cost of calls after a phone is stolen, there is no legal authority to support that. This is largely because the companies lack confidence to seek a court judgment against anyone who has indicated that they will contest the claim.

Looking merely at the terms themselves, the companies would have a strong case. For instance, Virgin's conditions tell customers, "you will be responsible for paying all charges on your account, whether or not they have been accrued by you personally."

But it is unlikely that, even relying on terms such as this, the company would succeed in any claim for calls made after a theft had been reported. The Supply of Goods and Services Act 1982 requires that contracts for services should provide reasonable care and skill. To fail to instantly cut off a phone known to be stolen would breach that term.

Courts would be unimpressed by protestations that different parts of the company had to be notified or security checks carried out first.

Even where the charges were incurred before the theft was reported, the "reasonable care and skill" provision could apply. Companies might be expected to spot unusual usage of the phone. Banks can do this with credit cards where they, rather than the customer, bear the loss. Mobile companies could too.

The company will not automatically be restricted to the credit limit it allows customers. Virgin's fairly typical terms state that customers may be allowed to exceed that limit. However in deciding on the overall reasonableness a credit limit, and a company ignoring it being vastly exceeded, would be taken into account.